Nikko goes part-disruptor with ETF deal

Exchange-traded funds (ETFs) – albeit of a niche variety – could be on the Nikko Asset Management NZ menu after its Japanese parent took a slice of US-based firm, ARK Investment Management.

Nikko NZ chief, George Carter, said the manager would test market demand here before offering any of the ARK ETFs, which target financial technology – or fintech – and other ‘disruptive’ industry sectors.

“Nikko has an exclusive distribution arrangement with ARK in the Asia-Pacific region,” Carter said. “But we will make sure there is an appeal to NZ investors before we offer [ARK products] to clients here.”

ARK founder and chief, Catherine Woods, will be a keynote speaker at the Nikko NZ ‘Foreword’ investor symposium slated for Wellington and Auckland at the end of this August.

Last week Nikko bought a 15 per cent stake in the New York-headquartered manager, which has a suite of six ‘innovation ETFs’: four actively-managed products targeting sectors such as industrial innovation, gene technology and new-generation web-based firms as well as two index-trackers covering 3-D printing and the Israeli tech markets.

ARK also builds bespoke strategies for institutional investors.

It is understood Nikko intends to promote ARK to both retail and wholesale markets in the Asia-Pacific.

In December 2016 Nikko launched the Global Fintech Equity Fund in partnership with ARK that has since sourced almost $US700 million from Japanese investors.

Takumi Shibata, Nikko global CEO, said in a statement the latest deal would lead to a “deepening of the connection” to ARK.

Under the terms of the arrangement Nikko will have “exclusivity to offer ARK products and investment strategies” in Asia-Pacific, including Japan, the statement says.